Cost Of Title Insurance

The cost of title insurance varies by locality, as well as with the complexity of proving a clear title to the property in question. Furthmore, costs of title insurance accumulate with every piece of property that is sold, because a new policy must be bought to accompany the title to the new owner. Adding still more to the cost is the requirement that a new policy be issued when a second mortgage is added, or home equity loans made, and when property is refinanced. All these factors will need to be taken into consideration when someone is comparing prices for being properly insured. The best thing someone can do is to get advice from others before purchasing a policy since "a wise man will hear, and will increase learning" (Proverbs 1:5).

The amount of the premium on a policy will reflect various factors. For example, clearing liens from the title may prove to be a time-consuming task, and will therefore involve a higher cost of title insurance. However, this is a necessary procedure since it states that the search has found no impediments to the ownership of the property by the person holding the rights to it. Also included in the price is payment for the time it takes for someone to search through courthouse records for records showing how the title of this property has been passed from one person to another since the very first deed was granted.

The closing costs on the newly purchased property will include the fees for insuring the property. As a matter of fact, when property is sold, costs of title insurance comprise some of the more expensive components of it. Generally, the prices are determined by rates set by State Board of Insurance in the state where the property is located, and is based upon the value of the property at the time of sale. Some states allow for an extra charge for the actual courthouse search of documents tracing the selling history of the said property, while in others, the premiums are all inclusive so there are no added fees. Either way, insuring property can be expensive, but necessary.

Before the requirement to buy insurance was an integral part of property transfers, sellers could get away with not informing a buyer of liens against the property in question. The cost of title insurance take on new meaning when viewed through history. Sometimes it was only after the deal was completed and the buyer had spent his life savings on a piece of land or a house that the buyer learned that someone else had an interest in the property--usually a bank, but sometimes individuals. Since the lien was passed with the purchase, the new owner was then obligated to pay off that debt along with the mortgage, making the costs of title insurance seem more attractive. The price for insuring newly purchased property is one of the items in closing on the property which should be questioned and understood before the transaction is completed.



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